Cleared Merger of Petrol and Geoplin

In March 2017, the European Commission unconditionally cleared the merger between Petrol, Slovenia’s largest petroleum products distribution firm, and Geoplin, Slovenia’s largest natural gas transmission firm. After a Phase I investigation, which focused on the markets for downstream wholesale supply of gas and retail supply of gas in Slovenia, the European Commission found no horizontal or vertical competition concerns.

Compass Lexecon assisted Petrol during the investigation period as Petrol’s and Geoplin’s activities appeared to overlap in the wholesale and retail supply of gas in Slovenia. We evaluated both the horizontal and the vertical effects of the merger, including the parties’ gas sourcing on the wholesale market and the interconnection capacity between Slovenia and its neighboring counties. We showed that there is virtually no overlap between the merging firms in the relevant markets. In markets with some overlap, we modeled the estimated price increase from the transaction (using UPP and GUPPI analysis) and studied the effects of partial cross-ownership based on a theoretical model.

The Compass Lexecon included Miguel de la Mano and Vilen Lipatov.